The Philippines was again named one of the countries with the most favorable environment for micro enterprises, ranking 4th among 55 countries surveyed by the international think tank Economist Intelligence Unit (EIU).
The ranking of the Philippines for this year was a two-notch improvement from 6th place in 2011.
According to the report titled “Global Microscope on the Microfinance Business Environment 2012” published by the EIU, regulations imposed by concerned government entities like the central bank helped the Philippines stay in the top 10 countries with the most micro business-friendly environments.
“The Bangko Sentral ng Pilipinas (BSP) continues to promote an enabling environment for microfinance, seeing it as one of its key poverty-reduction efforts,” EIU said in the report.
Some of the regulations in place in the Philippines that were supportive of the development of micro enterprises included the increase in the amount of loans that banks must extend to micro enterprises and the wholesale lending of government-owned banks to benefit micro-enterprise borrowers.
The Philippines got a score of 63.3 points (out of 100) in the overall micro business environment.
The three countries that outperformed the Philippines were Peru (with a score of 79.8 points), Bolivia (71.8 points) and Pakistan (67.4 points).
The countries were ranked based on two major categories, namely “regulatory framework and practices” and “supporting institutional framework.” The first deals with the regulatory environment while the second covers business practices and interaction between micro enterprises and the other parties concerned in their development.
The Philippines and Peru were tied on top of the list, with a score of 80 points, in the first category. This achievement was attributed by the BSP to several old and new regulatory issuances aimed at making credit more accessible to micro enterprises. The Philippines has enjoyed the top slot in this category for four straight years.
In the second category, the Philippines was ranked 15th with a score of 50 points.
According to the BSP, the Philippines has to realize the long-standing goal of establishing a credit bureau so that the country could significantly improve its ranking in the second category. With a credit bureau, lenders would be more comfortable extending credit even to micro enterprises as long as they have a good history of credit performance.
Others that landed in the top 10 countries with the most favorable environment for micro enterprises included Kenya (62.8 points), El Salvador (56.3 points), Colombia (56 points), Cambodia (55.7 points), Mexico (53.6 points) and Panama (53.6 points).
The countries that landed on the 10 lowest rankings were Haiti (29.1 points), Argentina (28.8 points), Congo (28.5 points), Sri Lanka (28.2 points), Egypt (27.4 points), Turkey (26.6 points), Thailand (25.5 points), Venezuela (25.2 points), Trinidad and Tobago (24.1 points) and Vietnam (21.5 points).